Economics

Nigeria Customs Should not be Denied on Destination Inspection Regime – Aniebonam

Founder, National Association of Government Approved Freight Forwarders (NAGAFF), Dr. Boniface Aniebonam, spoke with Francis Ugwoke, and insisted that the Nigeria Customs Service is equipped to take over destination inspection regime and should be allowed  to do so after the expiration of the extension of the  contract, which ends in June. Excerpts:

It is over four months since the contract of the Destination Inspection Agents was extended, can you assess the situation at the ports so far?
Nothing really; it has been smooth.

The information we have is that there has been shortage of scanning equipment and this is causing congestion, how true is this?
The issue is not even shortage of scanners, but the efficiency of scanning operation in Nigeria. Don’t forget that scanning operation can only give you image. You find out that after scanning, most of the containers are sent for physical examination and this result in double handling. But the point is that out of 22 mobile scanners, only 16 are working. But the low patronage of scanning operation is quite obvious.
People are not interested in scanning because for you to scan you have to load your cargo in a truck and you discover that you stay 2, 3, 4 days and you have not been scanned. For instance, the scanning unit can take 50 containers a day whereas one single freight-forwarder may have about 150 containers for scanning especially those involved in bulk import on tiles. So, as far as we are concerned, scanning operation in Nigeria is causing nightmare for freight forwarders.

In which of the ports do we have this problem?
We have this problem in Lagos and some other places. In border routes, there is scanning unit but some are not being used because in those places the trucks are over-sized and cannot enter the module.

Importers are complaining bitterly that this is costing them so much money, can you react to this?
That is the essence of what I have said, the low patronage of scanning units, because when you load, you are expected to go through the scanning unit and if all things you exit immediately, but for the non-compliance attitude of Nigerian traders, all the imports always enter red lane in the system which results to physical examination. So, you find out that many of the freight forwarders would prefer to go straight to physical examination to avoid demurrage suffered in loading trucks.

When you talk of physical examination, is that the same thing as re-routing in the system?
No, no.

Can you talk about re-routing in the system, which many freight forwarders embark on now as a result of the problem?
Re-routing depends on how one understands it. The risk profiling of the Customs creates opportunity for you to change channels. In the level of trade, you have the profile of red, blue, yellow, green and all that. If you are on green, you don’t need to go to scanning operation at all. The profile recognises you as a compliant importer.
When you are on yellow, you go for documentary check, and if you are on blue, then you also go probably through documentary checks, but when you are on yellow, you go to scanning. But like I said nobody wants to use scanning, because of the problem of loading trucks and remaining there for 3- 4 hours.

We also understand that re-routing is being abused by some people, how would you react to this?
Well, the issue of risk-profiling and management is the prerogative of service providers, and of course the customs is duly represented there. The abuse inherent in that is human. The only thing is that you cannot change the channel when you are programmed on red, but because of the abuse some people may want to change the routing process to blue or green as the case may be.

The World Bank team visited Nigeria and met with ports stakeholders recently, what was the outcome of the meeting?
The World Bank team came as we were told on the invitation of government to assess the readiness of the Nigeria Customs Service on destination inspection in terms of possibility of the scanning unit to perform functions. They wanted to know if the Customs is ready to manage, maintain and operate. The other issue is whether the service has data base on classification.
To us, we think the customs is ready for the scheme because six years after the first contract, the Customs had been prepared, but for obvious reasons in terms of the level of corruption in the system. You can call a dog some names in order to hang it. If the service providers or those who may be pursuing that agenda are now feeling that the Customs is not prepared to do so, then who is at fault? It cannot be customs because the contract term is quite clear that Customs will be prepared in six years to take over responsibility.
So if they have not done so, then the fault is that of the service providers not the customs. But the customs is even ahead of that to have developed modules, like the Nigeria Integrated Customs Information System which is an advanced level of Single Window where there will be interaction between the traders and Customs.

What are the other things that the Customs needs to do to take responsibility as far as Destination Inspection is concerned?
As are far as we are concerned, I don’t see the big deal about the scheme that the Customs cannot handle. Is it the e-commerce or what? I think the only thing we can be looking at is the issue of maintaining the scanning equipment and the capacity of Nigerians to read the image size, which over 300 Customs officers have undergone training and we have just 22 scanning units, out of which 16 are working. The manpower is there. Destination inspection is all about customs examination and I don’t see anything too difficult for anybody to say that the Customs cannot handle it.
Even at that, the Risk Assessment Report issued by the service providers are advisory documents to the Customs, in other words, Customs sometimes over-rules them. So, as far as we are concerned, we believe that government just decides to provide food for the boys. The service providers are not really adding value as far as the economy of the country is concerned. Even when you look at the money being paid, 1 per cent of FOB value of total import in a year for the service providers is about N42 billion and they have less than 500 staff members whereas the Customs Service is having a staff strength of 19,000 covering all the geo-political points of the federation.
Does this make any sense? It does not add value. That is why we (leaders of freight forwarding associations) made recommendations to the government that these service providers should be disengaged for the Customs to fully take over destination inspection and those Nigerians employed by the Services providers should be absorbed by the Customs. This makes more sense, this saves cost. We have even gone further to say that the money being paid to the service providers should be given to the police to serve as Trust Fund. The Nigerian Police needs a lot of money today to maintain security with the amount of security problem. So, what a responsible government should do is to develop a better way of funding the police.

We are aware that some group of agents leaders are against the take-over of destination inspection by the Customs, can you react to that?
Do you have idea of those people?

I don’t have to mention names…
No, let the public know… If at our age we cannot say how things are, then when shall we say it?
 
Please, I would prefer I don’t mention names…
You don’t have anything to say.
 
But it is true that some leaders of agents do not want Customs to handle destination inspection, and you may know this…
At my level I cannot be talking on hear-say.

But you know there are some people who are opposed to Customs taking over destination inspection. These people feel the Service is not yet prepared for this?
Well, opposition is normal. Even in politics, there is opposition. But to me, I don’t believe in unnecessary opposition because there is nothing we are fighting for. Election will come and people should go and contest, if they win, fine, if they don’t win, we join the other people and begin to talk of a better Nigeria. That is why Americans will tell you, politics should divide us, but economy should unite us. I think that is where we are missing it a lot in Nigeria.
Back to your question, those who are against customs taking over destination inspection have interest to protect and that is the nature of human beings. But you have to look at the benefits inherent in customs taking over the scheme. So, what we are after is national interest, not individual interest.

The argument is that if Customs takes over, they may manipulate the system, like the issue of re-routing, do you agree this could be so?
Manipulating the system is a human phenomenon. That is why government has put agents to protect its interest. Let me take you to another aspect, and that is the issue of fighting corruption in Nigeria. Why I think we have not been able to fight corruption in Nigeria is that the concept of giver and taker is culpable. It does not make sense to me. Somebody must be held responsible. If you are government agent and you make an application to serve and respect the constitution of the country, you don’t have to connive with me as a businessman. Your primary responsibility is to protect the interest of the government because government needs those monies to provide good things for the people, including all the infrastructures in the ports that can lead to efficient services, and other public utilities. And to me, the earlier we begin to look at issues as they affect the environment of the country the better for all of us.
Many are worried about the continued absence of a commercial regulator in the ports as a result of high charges being imposed on importers by shipping companies and terminal operators. What is your take on the issue?
It is a shame on some of us who have sworn an oath to serve this country. Some agencies are shying away from their responsibilities. Every agency of government has statutory function and the power to do the job. The powers are there but the problem is lack of political will, abuse, sabotage and corruption in the system. Most of these agencies are having delegated powers of the president, at least through the Ministers to act and get things right as stated in the constitution, so they should use the powers.
If you have nothing to hide, you should be seen doing your job without fear. If Mr. President sees you doing your job, he will be on your side even if people report you to him. It is about courage and resisting intimidation.

As founder of NAGAFF, tell us how you have been able to educate your members to allow best practices in their profession?
It is the responsibility of NAGAFF to educate members on best practices. Don’t forget that ignorance is expensive. We can only do the best we can within our limit and resources.

The CRFFN as a regulatory agency for customs agents introduced a training programme for agents but many agents are complaining that only very few of them can afford this, how would you react to this?
The issue is that CRFFN is still growing and when it is stable the issue of providing education for members can always be resolved.

There is speculation that CRFFN has problem with leaders of associations on the issue of practicing fee, can you comment on this?
Well, first, CRFFN is a baby of NAGAFF. We are the initiator and facilitator and you don’t expect people like us to fold our arms and see people infringe on the constitutional provisions. CRFFN is to regulate freight-forwarders; they don’t regulate importers, CRFFN acted in breach of its Act. You don’t have to go and regulate somebody you are not supposed to regulate. And that is why we told them it cannot happen. Even if they want to do that, it is only the agents who are representatives of the importers that you can negotiate with, who will pass the message to the importers. The Transport Minister is someone who loves justice, when we raised that issue, he immediately reversed himself, and that makes him a great man.

So, how is the Council funded because without this fee, it will be difficult for the Council to function?
Section 6 of the Council provided opportunities for self financing, and we have not looked at that area. Section 6 clearly explains how CRFFN can fund itself. This is through annual registration, practicing fee and others. They are there. It is not imposing any levy on an importer. The problem in the Council is that the Transport Ministry is struggling with freight forwarders in their Council. The problem in the Council is the Transport Ministry. Yes, it is undue interference. If you look at the CRFFN Act, there is the power of the Minister to control and regulate but every Act in the country has that provision. I think that is where the government is getting it wrong again.

With this scenario, what do you say is the future of CRFFN?
The future of CRFFN is very bright. But one thing is certain that nothing is permanent. I would expect the Minister of Transport to listen to good reason. He should call critical stakeholders. Such meeting should include the three membership categories of the Council. It will be all inclusive and things will flow. He should remove his hand from CRFFN, but play a role of supervision, not getting directly involved in the administration of the CRFFN.

Boniface Aniebonam
BioData
Chief Boniface Aniebonam is a maritime consultant and frontline freight forwarder. He is founder of National Association of Government Approved Freight Forwarders (NAGAFF) and also the current Chairman, Board of the New Nigerian People’s Party (NNPP). He is also a retired Customs officer. He is Chairman of Ocean Star Shipping Limited and Ojokoro Cement Limited.

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